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Defensive layers and yield opportunities
On-demand audiocast: Defensive layers and yield opportunities in fixed income.
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The unprecedented impact of COVID-19. Quarantine, social distancing, working from home and closure of retail outlets has led to a massive but unquantified demand shock
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Credit markets have reflected this demand shock with a significant sell-off, in terms of magnitude and speed, with record outflows. Governments and central banks have announced plans to provide considerable support for market liquidity, and should also benefit credit markets, but uncertainty remains
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In these uncertain times, company liquidity is critical. Our fundamental credit analysis focuses on assessing the impact by sector as well as ensuring that within each sector, companies have sufficient cash and bank lines to survive this challenging period
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We believe the current illiquidity and panic in the market are distorting credit spreads for all borrowers, regardless of fundamentals. Whilst remaining defensive, we believe our differentiated approach also present opportunities for investors